Castro Inc. - Cuba as Family Business

Castro Inc.: Cuba as Family Business
04/04/2016 10:28 am ET | Updated 22 hours ago
Daniel Williams
Author of "Forsaken: The Persecution of Christians in Today's Middle
East," available from O/R Books.

Everyone is all aflutter about the coming changes for Cuba now that US
President Obama and Cuban President Raul Castro have attended a baseball
game together in Havana and generally made nice to each other.

It doesn't look like anything resembling electoral, multi-party
democracy is on the way. Before, during and after Obama's visit, Raul's
secret police busily rounded up dissidents and demonstrators, and his
brother Fidel—now the skeletal voice of a faded revolution—was quick to
let Obama know that the island would take no lessons about democracy.

Okay, so what about the economy, the long-crippled example of failed
Communist planning, arbitrary control of pricing and confiscatory
depression of workers' wages?

There, changes are afoot. During Obama's visit, foreign reporters
marveled at the blossoming of little private hotels and restaurants, by
the ubiquitous hustling of contraband cigars, the endless moonlighting
of workers looking to increase their meager income, the farmers selling
pork, and the rampant prostitution. But the bigger change was ignored:
Raul Castro's creation of a state-sponsored oligarchy of which the
Castro family and its cronies are in charge.

It's a process of dynastic consolidation familiar to any post-Communist
to state-capitalist experience, be it China, Vietnam or contemporary
Russia as rejiggered by Vladimir Putin to reestablish Kremlin dominance
of the economy.

In Cuba, the Castros have been especially brazen in transferring
important pieces of the economy to themselves and associates.

The clearest exhibit is a government organization called Grupo de
Administración Empresarial SA, the "Business Administration Group,"
which operates state-owned companies that account for at least half the
business revenue produced in Cuba, including 40 per cent of foreign
currency earnings from tourism and imports. GAESA owns the best hotels
on the island, most retail store chains, rent-a-car companies and import
agencies. It is set to build a new tourist complex along Havana's old
port and run a new port and free-trade zone being constructed west of
the city. These are big-ticket items of Cuba's economy.

GAESA is a family firm. It is headed by Luis Alberto Rodriguez, Raul's
son-in-law. He's also an army general and Raul, of course, is the
comandante en jefe. If you want to make money in Cuba, Rodriguez holds
the keys to the vault.

This all represents Cuba's emerging profile as a family-military
dictatorship. Raul was Defense Minister when his brother Fidel ruled
Cuba. Over the years, he has sprinkled military officers throughout key
positions in the economy.

In the 1990s, when the Soviet Union broke up and Moscow left Cuba to its
own devices, Cuba collapsed into a decade of deprivation known
euphemistically as the "Special Period." Raul, looking for ways to
replace the old Soviet barter arrangements that had buttressed the
country's economy, dispatched military officers to negotiate investment
deals with foreigners. Among them were mobile phone ventures and rents
of free-trade zones plunked into former Soviet-built military bases. He
sent elite Soviet trained officers to hotel and accounting schools
abroad and encouraged them to read motivational business management books.

The 90s was also a Special Period for GAESA, which originated as an arm
of the military industries department. It began to absorb more and more
economic resources: Raul added CIMEX, then Cuba's largest commercial
consortium, to GAESA's portfolio, along with Habanaguanex, which owned
real estate, hotels and restaurants in the decrepit, but potentially
lucrative, gem of Old Havana.

GAESA grew to run a domestic air service (using old Soviet transport
planes!), tourist attractions (swim with dolphins!) and of course the
important sugar, cigars and tourist industries.
In short, Raul created an olive green state-within-a-state. And at
GAESA, he put his favorite son-in-law in charge of much of it.

Does this mean that the Castro family is enriching itself and friends
through nepotism and cronyism? A hint of the new oligrachy's personal
advantages was published last year in El Heraldo de la Habana, the
"Havana Herald." El Heraldo, an official Communist Party newspaper,
printed a story about Fidel's youngest son frolicking aboard a yacht in
the Mediterranean.

"Thanks to his father, Gulliver, Jr. travels quite frequently," the
paper wrote in a satirical mode. "He appears as a giant enjoying
himself." By the way, Antonio is a physician but also holds the post of
"Global Ambassador of the World Baseball Softball Confederation." I
wonder how he has time to treat patients.

It's not as if Cubans don't know what's going on. Dissident blogger
Yoani Sanchez commented, "Calling for austerity while living in opulence
has been common practice for Cuban leaders for more than half a century."

A few years ago, a Cuban author in the official National Artists and
Writers Union of Cuba wrote: "It has become evident that there are
people in government and state positions who are preparing a financial
assault for when the revolution falls. Others likely have everything
ready to produce the transfer of state property into private hands, like
what happened in the former Soviet Union." (The critic was quickly
kicked out of the Communist Party.)

This economic-political stranglehold appears headed toward creation of a
North Korea-style dynasty. On that score, Raul's son, Alejandro Castro
Espin, is in the spotlight.

Castro Espin is a colonel in the Interior Ministry, which runs Cuba's
General Intelligence Directorate, as well as the General Directorate of
Counter-Intelligence and the General Directorate of Internal Order, both
internal spy agencies. Last year, when Raul Castro met with Obama at
regional summit in Panama, Castro Espin was part of the small group that
sat in the room. He also accompanied Raul on his visit to the Vatican
last year. Raul's chief bodyguard is Castro Espin's nephew.

In the tradition of Kremlinology, it was always important to see who is
standing next to whom atop Lenin's tomb in order to decipher who really
holds power. Atop Cuba's economic and political tomb stand the up and
coming associates of Castro, Inc.

Follow Daniel Williams on Twitter: www.twitter.com/dwilliams1949

Source: Castro Inc.: Cuba as Family Business -
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